KFC Israel Enters Rehabilitation Proceedings Amid 50 Million Shekel Debt
Translated & summarized from Calcalist by baba
The company operating KFC in Israel, Smart Service Q&K, has entered court-ordered rehabilitation proceedings due to a 50 million shekel debt. Two trustees have been appointed to assess the chain's potential for recovery. The company operates multiple branches across Israel and recently filed for protection from creditors. The filing also outlines the brand's previous operations and a separate franchisee's planned closure.
The story in 5 lines · by baba
- KFC Israel faces rehabilitation proceedings with a debt of approximately 50 million shekels.
- The Beersheba District Court appointed two trustees to manage the company's situation.
- The company, Smart Service Q&K, operates multiple KFC branches across Israel.
- A previous franchisee, Mefco, plans to close its KFC operations in Israel in 2025.
- Employees' lawyer is seeking advance salary payments from the appointed trustees.
The Beersheba District Court has appointed two trustees to manage the company operating the KFC fast-food chain in Israel, which has accumulated a total debt of approximately 50 million shekels. The court also issued an order to commence proceedings to examine the possibility of rehabilitating the chain. The appointed trustees, accountant Aliza Sharon and attorney Amit Leiderman, are expected to submit an initial report within two weeks. Attorney Ophir Ronen, representing around 110 employees, welcomed the court's decision and plans to request an advance payment equivalent to a full salary for continuing employees from the trustees.
The company operating the chain, Smart Service Q&K, was established in 2020. It recently filed a request for a stay of proceedings and rehabilitation, citing its current debt, which includes about 37 million shekels in owner loans, 1.9 million shekels owed to employees, 9.5 million shekels in ordinary debts, and 1.2 million shekels owed to authorities. The company operates KFC branches in Tel Aviv, Givatayim, Petah Tikva, Rishon LeZion, Kfar Saba, Netanya, Ashdod, Kiryat Ekron, Haifa (three branches), and Kiryat Bialik.
The company's filing also detailed the brand's history in Israel. The KFC chain previously ceased operations in Israel in 2012. Upon its international relaunch, the global KFC franchise granted licenses to two separate entities. Mefco, the first franchisee, reopened KFC in Israel in 2019, focusing on the Arab sector and operating up to 12 branches at its peak. However, according to the filing, Mefco decided to close all its operations in 2025, reportedly due to the economic crisis and events following October 7th. Smart Service Q&K was established in 2020 to develop a separate and independent network of branches, distinct from Mefco.
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